Oil Markets Start Week on Softer Note

28 Sep 2015 | Author: | No comments yet »

Oil Slides on Concerns About Weaker Global Growth, Oversupply.

While the global oil glut has began to ease after record high U.S. production started to fall, resilient output from other major producers has kept the oversupply at more than 1 million barrels a day in the 93 million barrels a day global market.

Meanwhile, concerns about a slowdown in the China, the world’s second-biggest oil consumer, have soured the prospects for a demand-led recovery. “With global stock levels at all-time highs and a huge ongoing excess of supply over demand now and through 2016 bullish inclinations need to be reined in,” David Hufton of oil brokerage PVM said. Later in the day, the International Monetary Fund will publish its new macroeconomic outlook and expectations are that the fund will cut its forecast for global economic growth. Oil prices have fluctuated in line with wider markets, as fears over the strength of China’s economy, particularly after the country’s central bank devalued the yuan in August, unnerved global investors. “The atmosphere is febrile and oil is caught up in the mix driven by oil fundamentals one minute and macroeconomic fundamentals the next,” Mr.

There will be “laser focus” on U.S. oil-production data, and any signs that output has shrunk, even retrospectively for previous months under the EIA’s new methodology, could provide a boost to both WTI and Brent crude prices, Adam Longson, head of energy research at Morgan Stanley, MS 0.69 % said.

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